REDUCTION IN NUMBER OF DIRECTORS

Chronicle (Levin), 1 August 1946, Page 4

REDUCTION IN NUMBER OF DIRECTORS

■ m MOTION OPPOSED BY DAIRY - COMPANY ^ . Proposals for ehanges in the constitution of the board of direc-^ tors were embodied in a motion which was brought before the annual meeting of the KukuManakau Dairy Company on Monday by Mr. C. W. S. Campbell. Much discussion resulted, but the motion was lost. The proposals were to change certain of the company's articles of association, firstly, to reduce the number of directors from seven to five; and, secondly, to abolish the clause requiring a director to hold at le&st thirty shares in the capital of the company, making it possible for any shareholder to be a director. Before Mr. Camptiell spoke to the motion; the chairman (Mr. Ivo Bertram) said that it was not quite •in order, as it should have been in the hands of the shareholders 21 days before the meeting. It had not been out in time to be posted, while there were - not sufficient present'to have the required tnreequarters vote. He suggested that uhe motion be brought/ to a special meeting, or to the next general meeting. Mr. Campbell said that he was prepared to submit an amended motion. He then moved the following: /That it be a direction to the directors to amend the articles of association on the 'lines of the notice of motion, and action to be taken at the next general meeting." He said that Paraparaumu suppliers were surprised to receive a circular from the board, warning them of the "far-reaching effects" of the proposals. Mr. Bertram said that he took full responsibility for the circular. It was not sent out as an expression of the opinion of the directors, but rather because he felt it incumbent on him to let the shareholders know that a special resolution was coming before Jiie meeting. The articles were the same as those on which " the articles of all dairy companies were modelled. Anything which was not in the articles was covered by the Companies Act, section 125, which also covered the 21 day requirement. The board was in no way trying to hinder discussion or decision on the motion. Mr. W. J. Galloway then seconded the amended motion. He said that seven directors had been

appointed in the days when there was a greater output, when they not only managed the internal affairs of the company but negotiated for export saies of produce. To-aay the output was less, and the number of suppliers had dropped, but there were still seven directors. The business could be carried on just as well with the chairman, four directors, and the secretary and manager. At present a directorship wasi just a rest position for those who had retired from active payticipation in the industry. This was a young men's world, and calibre and quality were wanted. The southern ward should have eflicient representation, or suppliers would be lost. They had had dissatisfaction of service. The problems of the next two years would require to be faced with youthful vigour. Mr. R. L. Robinson said that he was against the proposals wholeheartedly. If the southern ward had complaints, they should have raised their voice before. They had had the opportunity to do so without such unwarranted criticism The fact that a director might hold only five shares was a secondary consideration, but it would be possible to have five directors with only 25 shares directing the company, with the whole not supplying as much as one man. - He had attended five meetings in the last month. The directors . were not just doing the work for f.un, ne continued, they were concerned about thb dairy industry. The company ivould 'Save only £35- a year by passing the motion. There was wider scope with seven directors, being a group of men with different lines of thought. The chairman's circular was intended to draw the attention of the shareholders to the fact that somqthing was going to happen to the articles, The company was run satisfactorily with seven directors, 10 why should it be changed at this stage? Mr. C. R. Cottle said that he was opposed to any interference with che present set-up. The saving was not worth it. Mr. E. Hogg resented Mr. Galloway 's remarks about elderly men. He said that the company had entrusted him to carry out the details of the pig farm and drainage. They had endorsed his actions. He had paid his own expenses to travel on the company's business. It had not cost them a penny. He carried out to- t-he letter whatever was entrusted *to him. Mr. H. J. McLeavey said that if ihe southern ward had wanted a younger man it was up to them to clect one. Mr. Bertram said that the articles were very hard to better. The numbers of shares qualifica■:ion had been very carefully. conjidered before the article in question had been drawn up. The rea-

sori for the 30-share qualification was to prevent the control of a co-operative company by outside interests, otherwise men who were not bona fide shareholders would control the company for outside interests. Referring to Mr. Galloway's p.oint about young men, Mr. Bertram said that there "wac nothing like an old dog for a hard road." There should be young men coming on to be trained, but it required a leavening of older men to get stability. Mr. Galloway said that the

southern section had asked a young man to stand, but he had declined. After further discussion, the motion was put to the meeting and lost.